Case study

1. Case study Members: 06国贸6班 韩文静 黄敏玲 黄雅斯 黄泳佩

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5. P&G'S Pert Plus: A Pan-European Product?

6. P&G was one of the first packed goods companies to go pan-European .Already in the early 1980s the American company had established a pan-European focus in its R&D-effort and a system of “lead counties” for pan-European product roll-outs . • The Pert Plus shampoo is a good example of the company’s pan-European drive .The case incorporates the market research information that typically is available for decision making and includes production cost data and completive comparions.

7. QUESTION 1 How attractive is the pan-European market for Pert Plus in terms of demand potential? Competition? Any cannibalization problems?

8. ******* ANSWER: ******* P&G is an international supplier of consumer goods it is a "global leader in health and beauty care products, detergents, diapers and food . P&G's presence in the hair care market in the U.S has been strengthened by innovative technology BC-18 and the replacement of an old brand 'Pert' with 'Pert Plus'- a mild shampoo with a fully effective conditioner. P"G decided to introduce BC-18 in Europe. Traditionally, the European market is highly competitive the main rivals are Colgate, Unileaver, and L'Oreal. The European market is segmented (i.e. value based) and sensitive to price changes (i.e. elastic demand).The introduction of the new product BC-18 brings with it a new marketing strategy for the company. In order to make a valued choice the 4P's of marketing have to be considered.

9. *********************** BC-18 technology would offer the European consumers 'Great looking hair in a convenient way'. Currently P"G are practicing a strategy called "Euro-Balancing" , it entails the concept of standardizing to the maximum and implementing localization only where necessary. By introducing a single brand name for its potential market, P"G does not have to create new marketing campaigns for targeted countries. The European market is heterogeneous, multicultural and multilingual; therefore, the name chosen for the shampoo should have to no connotations in a particular language's history or religion. Moreover, the name should be easily pronounceable in each culture.

10. *********************** The company is able to use the brand name of "Vidal Sassoon", which is an already well-known brand name in the United Kingdom, West Germany and Scandinavia and fits to the criteria mentioned above. It is in the upper market segment and has the established image of a high quality product; it would compliment the new BC-18 product. In instead of "Pert Plus", the European name could be "Vidal Sassoon Plus", the logo could look like the image bellow. Research indicates in Europe there are large price differences among hair care products. It can enforce the competitive strength of P&G. Although it hasn’t face the cannibalization problems. It still prepare for it .

11. QUESTION 2 What competitive advantages does Pert Plus have? Disadvantages? Any country of origin effect?

12. P&G is an international supplier of consumer goods it is a global leader in health and beauty care products, detergents, diapers and food . P&G's presence in the hair care market in the U.S has been strengthened by innovative technology BC-18 and the replacement of an old brand 'Pert' with 'Pert Plus'- the technology,“2-in-1” for shampoo and conditioner in one wash, was new to the market and had been developed in the P&G research lab.

13. Advantages: easy, time-saving, and convenient everyday use of the product . • Disadvantages: more expensive. • No country-of origin effect.

15. QUESTION 3 Which countries are the leading markets in Europe? What are the advantages or disadvantages of entering a leading market first?

16. ANSWER: The southern European countries, such as West Germany, Great Britain, France, Scandinavia and Benelux, are the lead markets in Europe.

17. ********************* • Entering a leading market first enable the brand to determine the most consumers' real interst in the product from the outset so that it could develop sales and acquire market information in the Pan-Europe market.Also it could build a clear and reconizable image in the target market.

18. ********************* • However,it was not easy that a new brand enter a new,lead market.With respect to the number of suppliers and brands,the European market was more fragmanted than U.S. market,undoubtedly a function of the different nationalities.The most inportant competitors for P&G were Unilever,Colgate and L'Oreal.

19. QUESTION 4 What does the marketing research tell about the price and positioning decision for Europe? Brand choice? Should the BC 18 technology be introduced with a pan European name, or with local brand names, or even with a mixture of both approaches?

20. Research indicates in Europe there are large price differences among hair care products. P&G has decided that it should place the new shampoo in the premium-priced segment; this is done in order to keep up the image of the shampoo as a high quality and innovative product. P&G should charge premium price in each country to be sold for 4.99 DM for the 200 ml bottle and for 5.99 DM for the 250 ml bottle in all the countries which had had been accepted during the consumer tests. The company cannot charge a price very few people can afford, this will also not be profitable for the company.

21. P&G is to become a leader in the European market of two in one hair products. The first year objective is to attract new European customers from competing brands to shift to the use of shampoo to BC-18. The aim is to exert a pull on the population in order to create a new market niche inside the shampoo market and encourage the people to use the new BC-18. In effect BC-18 technology serves the core need of washing hair and therefore it has to compete with the different national brands which are often well established.

22. As I see, the BC-18 technology should be introduced with a mixture of both approaches—with a pan-European name and local brand names. If we just introduce with a pan-European name is bad for the promotion of the BC-18. Local names sound approachable. People are likely to accept them. But if we just use local names we will have some problems in selling them in the whole Euro. So the best way is using both of them.

23. QUESTION 5 Given the economic data, what is your recommendation for launch strategy?

24. Let’s take Britain and as example. The markets in Europe are highly fragmented therefore, P&G cannot expect the same market shares in every country. The company should take into account the existing brands, their markets in every country and the conditioner use in every country. Great Britain: P&G must aim to attack Timotei's marketing leader position while maintaining their customer base of Head & Shoulders. As Head &Shoulders is more specific and known for its anti-dandruff ingredients, this should be possible. The company should try to gain 4.5 % volume market share in the first year and increase it to 5 % in the second year, regarding to the high use of conditioner in Great Britain.

25. Country Great Britain W. Germany France Benelux ScandinaviaMarket share (volume)4.5 - 5 %3 - 3.5 %2.5 - 3 %3.5 - 4 %4 - 4.5 % Since there is "a steady growth of the shampoo market and the conditioner market" and statistics show an increase in hair washing, a roll-out launch is recommended in Europe.

27. The end thank you